Income tax plans in budget debate focus

Labor has rejected a government analysis of its proposed income tax cuts as "hypothetical", as Treasurer Josh Frydenberg weighs up further relief for workers in his first budget.

An analysis of 2016/17 Australian Taxation Office data showed 1.9 million people on middle incomes would pay more tax under Labor's policy, the government argues.

This is due to bracket creep - when inflation pushes wages and salaries into higher tax brackets - being responsible for those people paying more.

Mr Frydenberg says it would put less money in peoples' pockets every week.

The comments come amid speculation the government is planning to bring forward already legislated tax cuts in next Tuesday's budget.

The government got its personal tax cut package through parliament last June, with the first stage kicking in for the current financial year and further reductions due in 2022 and 2024.

The cuts in their final iteration will lead to a single person on $30,000 keeping an extra $200 a year, while someone on an average wage of around $85,000 would get $540 and a $200,000-a-year earner would get $7225.

Labor has opposed the higher-income tax reductions and offered an alternative package to give cuts of $350 to people earning $25,000 and up to $928 for people on $90,000 a year.

Opposition Leader Bill Shorten says that means a couple respectively earning $60,000 and $80,000 would save $6000 in Labor's first three years in office.

"Labor is offering nearly 10 million Australian workers bigger, better and fairer tax cuts," he told reporters in Melbourne on Wednesday.

Shadow treasurer Chris Bowen stressed the data released by Mr Frydenberg is based on a hypothetical scenario in 2022 and 2024.

Should Labor win the next election, it could look to introduce measures to deal with bracket creep or provide further tax relief when it is fair and sustainable to do so, he says.

"Federal Labor is offering a better tax cut right now, not in two elections' time," he said

Meanwhile, the government unveiled road funding packages for north Queensland and Sydney on Wednesday as part of a plan to boost regional economies and unclog city congestion.

Prime Minister Scott Morrison also defended the government's support for the National Disability Insurance Scheme saying it would be fully-funded.

He took aim at Labor's past budget management.

"When you face the sort of difficult conditions ahead, you don't hand the economic wheel over to someone who doesn't know how to drive," he said.